FAQs: All About EPLI Insurance NJ

FAQs: All About EPLI Insurance NJ

Navigating the professional liability insurance space can seem overwhelming at first glance. You may have a lot of questions regarding EPLI Insurance, and we are here to put your mind at ease. Let’s explore some frequently asked questions you may have in regards to your EPLI policy.

What does EPLI mean?

Employment practices liability insurance

What exactly is EPLI?

It’s a kind of professional liability insurance, designed to protect employers from lawsuits by employees, with coverage that bridges the gap in general liability insurance so you’re completely covered. Legal fees and expenses can really add up, even if your case is thrown out or you win the case.

What coverage can I expect?

You can expect compensation for any loss that may be incurred when an employee files a lawsuit against you, covering all court costs and legal fees.

How much does EPLI cost?

Industry…claims history…amount of employees…how much coverage you’re looking for…these are all factors that contribute to the overall cost of your policy. In addition, it can vary based on whether you have an anti-discrimination and anti-harassment policy in place at your company, and whether your business has a history of lawsuits against it.

Let’s say you have 20 to 30 employees, within a fairly small business. You can expect to pay between $2,000 and $4,000 each year. You may scoff at the amount; however, when you compare that to the high costs of legal defense bills and settlement amounts if an employee were to sue you, it’s a drop in the bucket. A final factor in how much you’ll pay is the insurance company you select. Insurance companies vary in their rates, so do your research before making a decision.

What are the average employee lawsuit costs?

Here we will break down the average costs of legal and court fees for each kind of outcome:
• Out of court settlements: $15,000
• Case dismissal: $50,000 to $75,000
• Trial case: $125,000 or more

EPLI ensures your business won’t take a fatal hit should a lawsuit arise.

What types of businesses are most vulnerable to lawsuits?

Small businesses inherently carry a higher risk of lawsuits, as they can’t afford to keep an in-house legal team on the payroll. Bottom line is, they have much more to lose if they were to be sued.

Why would someone file a lawsuit against my company?

Check out these common examples of lawsuits:
• Wrongful termination
• Invasion of privacy
• Discrimination
• Breach of contract
• Emotional distress
• Harassment
• Wrongful denials of workman’s compensation, statute violations, wage violations, drug test false positives, libel and slander.

What can I do to cut down on my exposure to risk?

There are many ways you can lower your exposure to risk as an employer. Try these tips:
• Understand your state’s employment laws completely
• Come up with a company policy handbook highlighting procedures for discipline or termination of an employee
• Post a zero tolerance policy at your place of business for discrimination, substance abuse and harassment
• Implement a strict hiring and screening program
• Keep an open door policy to encourage employees to easily report violations without fear of retribution
• Conduct regular employee performance reviews
• Maintain detailed record systems to keep track of any issues that have arisen with employees and what was done to resolve each one

Get in touch with The Kerr Agency for more information about EPLI insurance at 732-383-5865.